The New Consumer

Coffee consumers are increasingly aware of specialty coffee. At the same time the specialty coffee industry is constantly evolving. Roasters offer Cup of Excellence coffees, micro-lots of different cultivars, and focus on seasonal and limited offerings. Specialty coffee retail is progressing with advancements in espresso equipment, a renewed focus on single cup brewing, and simplified menus exclusively featuring coffee and forgoing blended drinks, syrups, and even milk and sugar. Are specialty coffee consumers keeping pace? How has the specialty coffee drinker evolved over the years?

A combination of factors are currently driving choices made by specialty coffee consumers. These include everything from economics, trends surrounding transparency and sustainability, the growth of specialty coffee into all regions of the US, innovations in quality, and different models of customer service. Each of these elements contribute to consumers’ interactions with specialty coffee.

Economics

The economic downturn has led some customers to change their ordering habits. As coffee roasters and retailers are facing increased costs due to high green coffee prices, consumers are limiting their discretionary spending. During the past five years households have been looking for ways to trim their budgets. Luxury items are often the first causalities. Thankfully, specialty coffee has remained surprisingly resilient to the economic downturn. Even so, the combination of these financial pressures has changed the specialty coffee landscape. Retailers have adjusted their offerings and customers are changing their habits to adapt to this new economic reality.

Consumer spending on coffee remains strong compared to other discretionary purchases. Coffee is a relatively affordable luxury which has kept the industry vibrant; however, retailers contributing to the SCAA Coffeehouse Sales Trends Report indicate that price is an important factor influencing their customers’ choices of where to purchase coffee. At the same time retailers report that quality is more important to their customers than ever.

Retailers, faced with increased coffee costs due to record-high green prices, have responded in innovative ways. It’s becoming more and more common to see 8, 12, and 16 ounce offerings at quality focused independent retailers, compared to the 12, 16, and 20 ounce sizes on offer from national retailers. Smaller sized drinks let retailers offer high-quality coffees at a per-cup price that fits their customers’ budgets.

Consumers have also altered their ordering patterns. Many retailers I surveyed report that drip coffee and traditional espresso drink sales are growing faster than more expensive flavored lattés and blended beverages. These changes in ordering patterns can notably curtail a customer’s monthly expenditure on coffee. Price sensitivity is one factor leading consumers to purchase less expensive and more coffee-focused beverages. When coffee becomes the focus of a drink, rather than sugary additives, the quality of the coffee comes more into focus.

Transparency

Sustainable, locally produced, and transparent food systems are growing in importance to many consumers according to the specialty grocers and coffeehouse operators I spoke with. Many specialty coffee customers actively look for transparency, authenticity, social responsibility, and sustainability in their choices. For years, many specialty coffee companies have trumpeted the importance of these issues in their marketing materials, on retail packaging, in blogs, and through passionate and engaged baristas.

Third-party certifications like Fair Trade and Certified Organic have attempted to help consumers navigate some of these issues. More and more consumers are initiating conversations about certifications in the café or specialty grocery store. Many are looking beyond the labels to the specific sourcing and purchasing practices of coffee roasters and retailers. Coffee roasters have responded with Direct Trade, Relationship Coffee, and other tools that readily convey authentic, transparent, socially responsible, and sustainable business practices.

Regional Growth

Specialty coffee consumption is growing across the United States. Traditionally specialty coffee was predominant in the Northwest, from San Francisco to Seattle. The birth of the third place—a spot to gather other than the home or office—can be traced back to traditional Italian style cafés in San Francisco’s North Beach neighborhood through the development of national brands like Peet’s Coffee and Tea in the Bay Area and Starbucks in Seattle. These major brands created a group of customers willing to pay more for coffee, who seek out new experiences and drink better quality coffee than previous generations, which led to the development of many third-wave coffee companies focused on offering superior quality.

In the past fifteen years specialty coffee has seen growth beyond the Bay Area and Pacific Northwest. Specialty coffee consumption in the Southeast is exploding, as evidenced by Batdorf & Bronson Coffee Roaster’s and Counter Culture’s success in the region. The Northeast, specifically New York City, has arrived on the specialty coffee scene in a big way with great coffeehouses like Joe, Gimme!, and Bluebird Coffee Shop. Stumptown Coffee Roasters and Blue Bottle Coffee, both from the West Coast, have expanded into New York. Los Angeles is experiencing a proliferation of specialty coffee with Intelligentsia Coffee’s roastery and retail locations, Handsome Coffee Roasters, Cafecito Organico, and myriad other companies making an impact. Elsewhere in the country dynamic coffee scenes are evident with roasters like MadCap Coffee in Grand Rapids and innovative retailers like Café Evoke in Oklahoma City. These days great coffee is available everywhere, with regional coffee companies and online coffee retailers dedicated to quality.

Quality

Innovative coffee companies are pushing quality ever-higher. More and more coffeehouses have shunned the idea of being everything to everyone. These innovators provide an exceptional experience for those customers seeking a special experience. There is a parallel to fine-dining; great restaurants rarely attempt to please every possible consumer, rather they focus on executing their concept exceptionally. Similarly, inventive coffee retailers seek to appeal to a smaller, but more engaged (and ultimately loyal) customer. From their Bellingham, WA, coffee bar, Onyx cultivates customers with a delicious and pure coffee experience offering a limited selection of coffees from some of the world’s finest roasters and eschewing milk and sweeteners. More and more retailers have simplified menus fitting on a single chalkboard with minimal sizes, traditional espresso drinks, and hand-brewed coffee by the cup.

While discussing specialty customers with others in the industry and from the data presented at the 2012 SCAA Symposium, it became clear that there is a divide between coffeehouse visitors. On the one side there are customers who are curious about specialty coffee, are aware of the differences between coffee purveyors, and can clearly cite which coffee they prefer—though they may not have the vocabulary or experience to clearly express why they like one coffee more than another. These customers want to learn about preparing great coffee at home, consider roast dates when purchasing whole-bean coffee, and may be participants in public cuppings and brewing workshops. They are curious. They will ask about the coffee being served. These customers seek out and become fans of the aforementioned simplified cafés built around a coffee experience. Engage and listen to them, let them guide the conversation, build rapport.

On the other side of the chasm are coffee drinkers who are looking for a sweet drink, a jolt of caffeine, and may have little interest in a coffee’s origin, variety, or terrior. They are ordering flavored mochas and lattés, blended drinks, and constitute the majority of coffee consumers in the country. Their approach to coffee is different, but quality, efficiency, convenience, and service are important in both cases.

With exceptional customer service and baristas willing to meet these consumers on their terms, specialty coffee has a tremendous opportunity to convert many of them to connoisseurs of great coffee. A number of participants in a recent SCAA customer service class told stories of customers ordering drinks popularized by national retailers (e.g. 20 ounce cappuccino, caramel macchiato). Rather than turning away these customers, the most effective baristas offer to make a similar beverage with top-quality ingredients or offer the customer a chance to try something from the menu. By meeting these consumers part-way, we stand to convert them to specialty coffee drinkers.

Other ways to gently nudge these customers up the quality chain is to give them the experience of drinking great coffee. Share samples of your coffee with customers. Baristas who are excited about their coffee and readily sharing the experience of a delicious cup are actively bringing the specialty coffee consumer up the quality ladder.

Customer Service

Today’s specialty coffee customer has high expectations. The aesthetics of the café, the quality of the drink, and excellent customer service must combine to meet or exceed this expectation. More and more specialty coffee consumers are aware of quality and transparency in the coffee they purchase. The SCAA consumer focus groups showed in part that customers have an appreciation of specialty coffee’s attributes, feel a deep personal connection to the coffees they love, and are often willing to learn more—on their own terms and at their own pace.

There was a time when too many coffee professionals fit the model of the coffee snob. These baristas projected an insiders’ attitude, acted like the harbingers of taste, and created barriers that kept consumers from specialty coffee. In recent years more and more coffee professionals have refocused their efforts at customer service and engaging customers, helping customers to explore taste without arrogantly defining taste for them, and offering education when appropriate. This new rapport is making an impact. Baristas surveyed for this article state that customers at the café are frequently asking for more information about their coffee. They are curious about flavor and taste, freshness, roast levels, sustainable production methods, third-party certifications, coffee origins, farmer and cooperative names, and coffee production.

No matter how developed our customers’ palates, knowledge and vocabulary of tasting, or experience with fine coffee, retailers should be cognizant of meeting customers on their terms. Specialty coffee stands to gain more from efficient, personable service and providing information about coffees in meaningful and appropriate ways. Perhaps you simply tell every customer what coffee you are serving as you hand them their mug. Eventually some of these customers will start probing for more details about what’s in their cup. Others won’t. Be aware of those customers who are just looking for a quick and convenient stop and let your superior product speak for itself. As an industry, specialty coffee has tremendous opportunity for growth by converting consumers who tend towards mass produced coffee. Your hand-brewed cup might cost a little more and take a little more time. Effective customer service and a great cup of coffee will turn many of these consumers into regular customers.

In Issue 3 of the Specialty Coffee Chronicle Lily Kubota explores in detail some of the SCAA Consumer Study outcomes. Read the full article here.

Marcus Young is devoted to sharing the science, artisanship, and trends in specialty coffee. He consults with retailers to grow their business through continuing coffee education, customer engagement, and coffee-centric events. Marcus is a regular contributor to industry publications and lectures at trade events. He strives to connect coffee professionals as Batdorf & Bronson’s Community Outreach and Customer Coordinator. His position entails business development and marketing, training and consulting with customers, fostering the barista community, public and trade demonstrations, coffee product development, working to develop custom blends for wholesale accounts, cupping new offerings, and devising brewing guidelines and training materials.